Repossessed Properties for Sale

The whole point of becoming a private rental sector landlord is to make money, there’s no denying this fact. Any method by which you can do this is a bonus, and finding properties with price tags below their true market value is a great place to start. Repossessed properties for sale are therefore the perfect properties to start looking at, but what exactly will this type of property give you?

 A Large Saving

Mortgage lenders who decide to put repossessed properties for sale in property auctions are generally looking for a quick sale. They won’t want to be bothered with estate agents, advertising and long-winded applications. They simply want to recoup as much of their money as they possibly can, and the easiest way to do this is through a property auction.

Now, because they simply want to sell the property they are willing to put its auction guide price at around 30% lower than the estimated market value. The auction itself will actually start at a lower price than the guide price, and depending on the competition you could get the property for close to the guide price. You could end up paying a little more as well, but you’ll still get the property for a much lower price than its value.

A Hassle-Free Purchase

Most repossessed properties for sale are vacant at the time of the auction and are sold without a chain. This means that you can often gain access to your new property within a matter of days, providing you can arrange the finance quickly.

Instant Equity

Virtually all repossessed properties for sale provide instant equity. This could at worst be a few thousand pounds and at best be upwards of £40,000 (by the time you have renovated and redecorated). The equity you gain by purchasing repossessed properties can later be used to finance the purchase of other repossessed properties for sale, so providing an easy way to grow a substantial property portfolio.     

Instant Profits

Let’s say that you buy a property for its market value and it costs you £200,000.  You use a buy to let mortgage to finance the purchase and the mortgage payment per month is £900. You rent the property out for £1000 per month and so make a £100 profit per month.

Now let’s say you buy the same property via the ‘repossessed properties for sale’ section of an auction and you pay £140,000 (a 30% saving). Your mortgage payment on this amount is set at £650 per month but you still rent the property for £1000 per month. This gives you £350 per month profit, and if you take the time and effort to convert the property into a HMO you could literally triple the rental income.

So, all in all repossessed properties for sale are definitely worth considering in regards to your next purchase. You may have to put some work in to get them up to scratch but a bit of manual labour is a small price to pay for handsome profits and instant equity.